CDD Urges FTC to Review Proposed NTIA Code of Conduct

We respect the hard and well-meaning work of our NGO colleagues who worked on this proposal.   But we have many concerns about the process the Commerce Department has led.  In deference to our NGO colleagues, we are abstaining.

Tens of millions of US online users use apps daily, which have increasingly become a part of our daily lives.  Most apps, however, are firmly integrated into a digital data collection process that is pervasive, poorly understood, not regulated, growing in capabilities, and are very sophisticated in terms of reach and impact.

We are concerned about a number of issues raised by the proposed code, related to actual mobile app and mobile data business models/practices; the lack of independent user testing; vagueness in definitions and potential loopholes.  That’s why we will soon file at the FTC a report and industry documents that will help it better evaluate how to structure consumer privacy safeguards for the mobile app marketplace.

At the beginning, we urged the NTIA to support a review of existing mobile and app related practices to help determine the extent and range of data collection practices of apps--such as involving app user discoverability, business and app monetization models; evaluate the academic and extensive industry research on consumer relationships to mobile devices and services, etc.; and especially focus on sensitive data categories involving finances, health, race/ethnicity, youth and seniors.  The lack of candor from industry participants about their actual practices that should be addressed by privacy safeguards is just one glaring problem with the Commerce Department process.  The dominant app distribution companies--Google, Apple and Facebook--failed to provide information as well. 

The stakeholder process is intrinsically flawed.  It principally relies on industry to provide accurate information on the practices they actually engage in.  Industry cannot be expected to challenge their fundamental—and ever expanding--“data maximization” business model.    The FTC, FCC, CFPB and FDA need to engage in a much-needed regulatory overview of the mobile app environment (addressing for example, issues related to financial services and health).  These agencies should incorporate today’s proposal with a thorough analysis of how US consumers are actually impacted and influenced by the mobile and mobile app data business model.  Americans deserve better that what the Commerce Department delivered.

Consumer Federation of America Statement

Consumer Watchdog Statement

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